Oct. 21, 2013

Robert J. Corry

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This election, Colorado voters will consider Proposition AA, a 15 percent sales tax plus a 15 percent excise tax on marijuana sales. Colorado has never taxed a particular industry or product at this high of a rate. These taxes would be in addition to the federal, state and local taxes already in place on marijuana. Federal taxes on marijuana businesses and consumers are already higher than any other industry due to the inability of these businesses to take full deductions.

Proposition AA would be the highest tax increase in Colorado history, a reckless experiment that would create a dysfunctional market for marijuana, undermining the goal of the “Alcohol-Marijuana Equalization Initiative” (Amendment 64). As a framer and supporter of Amendment 64, the purpose of the measure was to bring marijuana out of prohibition and regulate it like alcohol. Colorado’s alcohol industry pays less than 1 percent in state excise taxes.

Prohibition does not work. Excessive taxes are another form of prohibition.

The pro-tax campaign is supported by what Jacob Sullum of Reason Magazine has accurately labeled “The Marijuana Cartel,” i.e. large dispensaries and drug dealers that use burdensome and expensive government regulation and taxation to suppress fair competition from smaller businesses.

The pro-tax campaign is running a campaign of fear, alleging that the U.S. Department of Justice wants high taxes on marijuana. I recently asked the U.S. Attorney for Colorado, John Walsh, whether he supported Colorado Proposition AA, and he responded that the U.S. Department of Justice did not endorse Proposition AA. An Aug. 29, 2013, memo from the U.S. Department of Justice providing official guidance regarding marijuana does not even mention local or state taxes on marijuana, but does mention an enforcement system that is “effective in practice.” Excessive taxes create a dysfunctional system that is “ineffective in practice” and creates a marijuana market ripe for takeover by the unregulated, untaxed underground market.

Proposition AA would re-establish Prohibition and drive marijuana back underground, to the detriment of all Coloradans. Please vote “no” on Proposition AA.

Robert J. Corry Jr. is treasurer and attorney for the “No on Proposition AA” Campaign.